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Alliances among asymmetric countries

Author

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  • Prabal Roy Chowdhury

    (Indian Statistical Institute, New Delhi)

Abstract

We examine alliances between asymmetric countries. We find that the results depend on the nature of the equilibrium. If the equilibrium is an interior one then, with an increase in asymmetry, the level of the alliance-wide defense good decreases and the divergence between the first best and the equilibrium level of the defense good increases. In case the equilibrium involves a corner solution, these results are reversed though. It may be argued, however, that the interior equilibrium case is the more relevant one.

Suggested Citation

  • Prabal Roy Chowdhury, 2006. "Alliances among asymmetric countries," Discussion Papers 06-04, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:06-04
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    File URL: http://www.isid.ac.in/~pu/dispapers/dp06-04.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Alliance; Asymmetry; Public good; Defence;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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